Exploring the term “non-financial information”: an academics’ view

Abstract

Purpose With the European Union (EU) Directive 2014/95/UE, there is a growing interest in the corporate disclosure of “non-financial information” (NFI). However, no generally accepted definition of this term exists. This paper aims to reflect on the meaning and importance of the NFI definition by investigating how this term is defined in the literature and by exploring scholars’ cognitive perceptions of its meaning. Design/methodology/approach Two different research methods were used. A systematic literature review of NFI definitions was integrated with a survey to a sample of Italian scholars working on the NFI research topic. Findings This study demonstrates that the meaning of NFI is still ambiguous and multifaceted as neither a common understanding nor a single and generally accepted definition of the term exists. As the advent of the EU directive, this term has often referred to information about society and the environment, though most academics define and understand NFI differently, as corporate social responsibility (CSR) issues, intellectual capital information and information that are external to financial statements. These definitions pave the way for conceptualising NFI as a genus and its different understandings (i.e. CSR, ESG information, etc.) as species. Therefore, what constitutes NFI is open to interpretations. Research limitations/implications This paper contributes to enriching the literature on the meaning of NFI and providing further insights into explaining the heterogeneity of the NFI definition. Practical implications This paper provides researchers, practitioners and regulators with some novel insights into the meaning and understanding of NFI. It provides regulators and standard setters with knowledge for building a commonly accepted definition of NFI. Meanwhile, policymakers, regulators, practitioners and academics can contribute to establishing a definition by following three approaches: regulative, open and adaptive. This can help to avoid the risk of an information gap among stakeholder expectations, regulator requests and NFI reporting in practice. Originality/value The literature focussing on the meaning of NFI is still scarce. This study contributes to extending the knowledge of how the term NFI is defined and understood by academics.